How to Set Up Repeating Invoices in Xero (Step by Step)

Why Repeating Invoices Are Worth Setting Up

If any part of your revenue is recurring, a retainer, a subscription, a maintenance plan, rent, or a regular service, you should not be creating those invoices by hand every month. It is slow, it is easy to forget, and a forgotten invoice is money that sits uncollected while your cash flow suffers.

Xero repeating invoices solve this. You build a template once, tell Xero how often to generate it, and the system either creates a draft for you to review or sends the invoice automatically on a schedule. For a business with even a handful of recurring clients, this saves hours a month and makes sure nothing slips.

This guide walks through how repeating invoices work in Xero, how to set one up, and how to keep your GST and account coding correct along the way.

What Repeating Invoices Can and Cannot Do

A repeating invoice in Xero is a template plus a schedule. Xero uses it to generate real invoices at the interval you choose. It is ideal when the amount, the line items, and the client stay the same each cycle.

Repeating invoices work well for:

• Monthly retainers and service fees
• Software or membership subscriptions
• Rent and licence fees
• Regular maintenance or cleaning contracts
• Any fixed recurring charge

They are less suited to work that changes every period. If your billing amount varies each month, such as hourly work or usage-based charges, a repeating template will still save the setup time, but you will need to edit each draft before it goes out rather than letting it send automatically.

Step 1: Create the Repeating Invoice Template

In Xero, go to Business, then Invoices, then click the small arrow next to New Invoice and choose New Repeating Invoice. You will see a template that looks like a normal invoice with a scheduling panel at the top.

Fill in the scheduling details first:

• Repeat this transaction every: Set the interval, for example every 1 month, every 3 months, or every 2 weeks.
• Invoice date: The date the first invoice will carry. This drives the payment due date and which BAS period the sale falls into.
• End date: Leave it blank for an open-ended arrangement, or set a finish date for a fixed-term contract.

Then complete the invoice body: the contact, the account code for each line, the description, the amount, and the tax rate. Everything you enter here carries into every invoice Xero generates from this template.

Step 2: Choose How Invoices Are Created

This is the most important decision on the template. Xero gives you two options for what happens when each invoice is due to be created:

• Save as Draft: Xero creates the invoice as a draft and leaves it for you to review and approve. Use this when you want a set of eyes on the invoice before it goes out, or when the amount sometimes needs adjusting.
• Approve: Xero creates and approves the invoice automatically, so it lands in your accounts receivable without you touching it.

There is also an option to email the invoice to the customer automatically once it is approved. Tick this only when you are confident the invoice is always correct, because once it sends automatically there is no manual checkpoint. For most small businesses, approving automatically but reviewing before the first send of a new arrangement is the safe middle ground.

Step 3: Get the GST and Coding Right

Because a repeating template generates the same coding every cycle, an error here repeats every month until you catch it. Take an extra minute to confirm:

• Account code: The correct income account for each line, so revenue lands in the right place on your profit and loss.
• Tax rate: Usually GST on Income for a standard taxable sale. If the supply is GST-free, set it correctly now so you are not over-reporting GST every quarter.
• Amounts are tax inclusive or exclusive: Check the setting at the top of the invoice matches how you quote your prices.

Getting this right once means every generated invoice is clean and your BAS figures stay accurate without manual fixing.

Step 4: Add Payment Options and Terms

To get paid faster, make it easy for the client to pay the moment they open the invoice:

• Connect a payment service such as Stripe or GoCardless so a Pay Now button appears on the invoice.
• Set clear payment terms, for example due 14 days after the invoice date.
• Use a consistent branding theme so recurring clients recognise your invoices immediately.

Direct debit through GoCardless is particularly useful for repeating invoices because the payment can be pulled automatically each cycle, which turns your recurring revenue into genuinely hands-off cash flow.

Managing Repeating Invoices Over Time

Once your templates are running, keep an eye on them:

• Review the list regularly. Go to Business, then Invoices, then the Repeating tab to see every active template, its next issue date, and its amount.
• Update, do not recreate. When a client's fee changes, edit the existing template rather than building a new one. This keeps your history clean.
• End templates promptly. When a contract finishes, set an end date or delete the template so you do not keep billing a client who has left.
• Watch the drafts. If you use the Save as Draft option, build a habit of approving the drafts on the same day each month so invoices never sit unsent.

How SortBooks Helps

Repeating invoices keep your billing tidy, but they are only one side of clean books. Once those invoices are paid, the payments still need to be reconciled and coded correctly in Xero, and any variable charges need a human check. SortBooks connects to your Xero file, categorises the incoming payments automatically, validates the GST treatment, and flags anything that looks off before it reaches your BAS.

The result is recurring revenue that bills itself through Xero and reconciles itself through SortBooks, leaving you to focus on the work rather than the admin.

Final Thoughts

Repeating invoices are one of the highest-value features in Xero for any business with recurring revenue. Spend the time to set the schedule, coding, and payment options correctly once, and you remove a whole category of monthly admin. Review your templates regularly, keep the GST treatment accurate, and let automation handle the rest.